Tax Type
Retail Sales and Use Tax
Description
Our-of-state resale exemption certificate; Purchases for resale
Topic
Exemptions
Date Issued
06-28-1991
June 28, 1991
Re: Request for Ruling: Sales and Use Tax
Dear*********************
This will reply to your letter requesting a ruling on the applicability of the Virginia sales and use tax to equipment sold by***************(the Taxpayer).
FACTS
The Taxpayer is a manufacturer of commercial refrigeration units and registered as an out-of-state dealer. The Taxpayer sold refrigeration equipment to their ***********distributor, for delivery to The ************** distributor did not hold a Virginia resale exemption certificate and was billed for the amount of Virginia sales tax due. The Taxpayer remitted the amount on their January and February 1990 Virginia sales tax returns. The distributor subsequently refused to pay the tax on the grounds that when they purchased the equipment, they were doing so for their customer who requested the equipment be shipped to Virginia. The Taxpayer requests a ruling on the applicability of the Virginia sales and use tax on sales made when the purchaser does not present a Virginia resale exemption certificate.
RULING
Va. Code §58.1-603 imposes a tax upon every person who engages in the business of selling at retail or distributing tangible personal property in Virginia. Virginia Regulation (VR) 630-10-20 (copy enclosed) provides that all sales of tangible personal property are subject to the tax until the contrary is established. The burden of proving that the tax does not apply rests with the dealer unless he receives, in good faith a certificate of exemption from the purchaser indicating that the property is exempt under Virginia law.
Items purchased for resale are exempt from Virginia sales and use tax. However, as a registered dealer, the Taxpayer is liable to collect and remit the tax on items sold and shipped to Virginia unless, a valid Virginia resale exemption certificate which appropriately references the out-of-state registration number is presented to the Taxpayer. A credit would be allowed to the Taxpayer if a valid Form ST-10 (copy enclosed) is obtained from the Taxpayer's customer. In that case, the Taxpayer can seek a credit on a subsequent return on Form ST-8 (copy enclosed) for tax already paid but not due in a prior period.
If you have any questions regarding this matter, please contact the department.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner